RBNZ Minutes: OCR left unchanged in light of the current level 4 lockdown and health uncertainty
|The Reserve Bank of New Zealand (RBNZ) published the minutes of its August monetary policy decision, in which the central bank kept the OCR on hold amid fresh covid lockdown n the country.
Key takeaways
In light of the current level 4 lockdown and health uncertainty, the committee agreed to leave the OCR unchanged at this meeting.
Committee agreed that their least regrets policy stance is to further reduce monetary policy stimulus.
Committee discussed the merits of an increase in the OCR at this meeting and considered the implications of alternative sequencing of OCR changes over time.
Members now had more confidence that rising capacity pressures will feed through into inflation, and that employment is at its maximum sustainable level.
Members concluded that they could continue removing monetary stimulus, following their decision to halt additional purchases of government bonds under the LSAP programme at their July meeting.
Committee reiterated that the OCR is currently the preferred tool to adjust the level of stimulus in the economy.
Committee noted that a number of factors are expected to weigh on house prices over the medium term.
Members expressed uncertainty about how quickly momentum in the housing market will recede.
Related reads
RBNZ keeps OCR unchanged at 0.25%, NZD/USD slumps
NZD/USD slumps below 0.6900 to refresh nine-month low on RBNZ’s hawkish hold
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.